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Approach – Answer: General Studies Mains Mock Test 872 (2017)

Answer all the questions in NOT MORE THAN 200 WORDS each. Content of the answers is more important than
its length. All questions carry equal marks. 12.5X20=250

1. The “Outcome Budget” reflects the endeavour of the Government to convert "Outlays" into
"Outcomes". Explain. Also, discuss why the potential of outcome budgeting remains untapped in the
Indian context.
Approach:
 Explain Outcome budgeting in the context of changing outlays to outcomes.
 Highlight its benefits.
 Discuss challenges faced by India while using the practice of outcome budgeting

Answer:
Budgeting is an annual government exercise of estimating receipts and expenditures for the coming year.
Accordingly, outlays are assigned to various ministries and government schemes on the basis of
estimated output or outcome.
Under ‘Outcome-based Budgeting’, outcomes of each programme or scheme designed by the
government is estimated. These Outcomes are the end results or impact of initiatives and interventions.
Here Output must be differentiated from Outcome, as the former deals with quantitative result while the
latter also includes qualitative aspect.
For instance, if outlay of 100 Crore is assigned for construction of hospital, then the ‘output’ would be
measured in terms of physical infrastructure, whereas ‘outcome’ will also include the impact of the
initiative, like percentage reduction in death rate, maternal mortality rate in that area among other
parameters.
Benefits of Outcome based Budgeting
 Outcome Budgeting shifts the perspective from “doing the job” to “doing it well”.
 It leads to efficient service delivery, transparency, and accountability.
 The outcome budget indicates actual performance which helps people scrutinising the government
and educates them about policies.
Outcome Budgeting in India:
The Outcome Budget was first introduced in India in 2005-06, with an understanding that “the people of
the country are concerned with outcomes, not outlays”. However, limited progress has been made in this
front, primarily due to three key reasons:
 Much of the development interventions are routed through the state governments. Only a few states
have adopted planning outcome budgeting.
 Limited understanding exists on the linkage between specific Government interventions and their
outcomes. Ministries face difficulties in spelling out the outcomes on ex-ante basis.
 The principles and intent of outcome budgeting are often overlooked. There is lack of programme
formulation, programme implementation and programme monitoring capabilities in the ministries.

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 Way Forward
 Appropriate Centre-State institutional framework should be created to standardize set of output
indicators and processes for collecting and collating outcome related information.
 Effective feedback system such as social audit is required in implementation of every programme.
 The country needs to evolve ways and means to strengthen its institutions, without undermining
them. Following steps have to be undertaken in this regard:
o strengthening the Public Accounts Committee
o professionalising the internal audit and vigilance organisation in the ministries
o building capacities for risk management techniques in the programme divisions
o making budget division and budget formulation activities independent of the executive to
improve the outcome of programmes.
o as the outcome may not be co-terminus with the period of the budget. There needs to be
defined intermediate outcomes as well.

2. What is agroforestry? Discuss its potential in making agriculture sustainable and viable. In this context,
discuss the salient features of National Agroforestry Policy.
Approach:
 Start with explaining agroforestry.
 Discuss its potential in making agriculture productive and sustainable.
 Discuss the salient features of National Agroforestry Policy that can fulfill the above objectives.
Answer:
Agroforestry is a land use system which integrates trees and shrubs on farmlands and rural landscapes to
enhance productivity, diversity and ecosystem sustainability. It is a dynamic, ecologically based, natural
resource management system that, through the integration of woody perennials on farms and in the
agricultural landscape, diversifies and sustains production and builds social institutions. Agroforestry has
the potential to achieve sustainability in agriculture while optimising its productivity and mitigating
climate change impact. This can be understood from the following points:
 Resilience of agriculture: Agroforestry leads to carbon sequestration, increased soil quality, erosion
control, reduced fossil fuel use, limits nutrient and pesticide runoff – thus mitigating ill effects of
agriculture and increasing its resilience. Reducing unemployment: 64% of our timber requirement is
met through trees grown on farms, which generates 450 employment-days per hectare per year.
Systematic promotion of agroforestry can be a potential employment generator.
 Increased farm productivity: Increased biodiversity on account of agroforestry, would increase
agricultural productivity.
 Income augmentation: Agroforestry provides a diverse portfolio of products (forage, fruits, nuts,
biomass, medicinal plants etc.) which allows a sustained revenue stream. 80% of farmers are small
land-holders, therefore, agroforestry can be a powerful tool in augmenting their incomes and
fighting poverty.
 Using the ecological functions of trees, animals and crops has the potential of increasing food
production while simultaneously reducing agriculture’s footprint on the environment. Agroforestry is
most beneficial for the poor whose lives are the most affected by environmental degradation.
 Agroforestry can also help in conserving habitat for wildlife, energy conservation, bioenergy
production and bioremediation.
National Agroforestry Policy 2014: Salient features
India launched the world's first agroforestry plan in February 2014, which will help increase the area
under agroforestry from 25 million hectares to 53 million hectares.
 Development of National Agroforestry Board: It will provide coordinated effort to promote
agroforestry in India.

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  Support to small farmers: Encourage and expand tree plantation in complementarity with crops and
livestock to improve productivity, employment, income and livelihoods of rural households,
especially the small holdings farmers.
 Improve resilience of agriculture: Protect and stabilize ecosystems, and promote resilient cropping
and farming systems to minimize the risk during extreme climatic events.
 Save foreign exchange: Meet the raw material requirements of wood based industries and reduce
import of wood and wood products to save foreign exchange.
 Promote ecological sustainability: Complement achieving the target of increasing forest/tree cover to
promote ecological stability, especially in the vulnerable regions.

3. Comment on the problem of rising Non Performing Assets (NPAs) in India, with particular reference to
public sector banks. Examine the effectiveness of the steps taken by the government in recent times to
deal with this problem.
Approach:
 Briefly highlight the NPA problem of India and its causes.
 Discuss in detail how PSBs are affected by NPA and its implication on Indian economy.
 Mention steps taken by government to deal with the problem.
 Discuss the effectiveness of these steps.
Answer:
The entire Indian economy is witnessing a rise of Non-Performing Assets (NPAs). More than Rs. 7 trillion
worth loans are classified as Non-Performing Loans in India, which roughly translates to near 10% of all
loans given. The key reasons cited for this are: unplanned expansion of Indian corporate houses during
boom periods and the Global financial crisis impacting corporate performance and thus, stressing their
balance sheets.
The severity of NPA problem is much higher in Public sector banks (PSBs) as compared to private banks
because:
 PSBs have more exposure in the sectors — infrastructure, steel, textiles, aviation, and mining —
which have contributed towards a big rise in NPAs.
 Inefficient borrower screening, credit appraisal and post-disbursement supervision.
 Lack of effective loan recovery mechanisms.
Such huge levels of NPAs cripple the whole economy as banking sector raises interest rates, reduces
funding to nation-building projects resulting into increased unemployment and lowering of GDP growth.
To address the problem of NPAs, the government took several measures such as:
 Mission Indradhanush to transform PSBs.
o Established Bank Board Bureau for appointments to PSBs, developing strategies for raising funds
and overseeing consolidation of PSBs.
 Announced Rs. 70,000 Crore for recapitalisation of banks.
 RBI has over the past few decades come up with a number of schemes such as Corporate Debt
Restructuring (CDR), formation of Joint Lenders’ Forum (JLF), flexible structuring for long-term
project loans to infrastructure (or 5/25 Scheme), Strategic Debt Restructuring (SDR) scheme and
Sustainable Structuring of Stressed Assets (S4A) to check the menace of NPAs.
 Asset Quality Review was conducted for early identification of the assets and preventing them from
becoming stressed by appropriate action.
 Insolvency and Bankruptcy Code Act, 2016 to tackle the Chakravyuaha challenge of the exit problem
in India.
 The Banking Regulation Act has been amended to give the RBI more powers to monitor bank
accounts of big defaulters.
 The SARFAESI Act, 2002 was amended in 2016 for quick recovery of stressed assets.

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 However, these measures have seen limited progress in tackling NPAs.
 The schemes like S4A has limited applicability as most corporate defaulters failed to meet the
standards. Itcannot be applied to all cases of stressed exposure. It can be applied only to operational
projects and not to under construction projects.
 The recapitalisation amount has fallen short of the amount needed by banking sector.
 The bank officers are too cautious with debt restructuring due to the fear of anti-graft charges.
 The time bound manner in which Insolvency and Bankruptcy code aims to resolve cases have been
lauded by the experts. However, the long term effects are yet to be seen.
Several experts point towards further increase in NPAs in Indian banking sector. To address this problem,
the government and banking sector together should consistently work on remedial measures like the
BAD Bank and other structural reforms. The Government is also bringing Financial Resolution and
Deposit Insurance Bill for the insolvency of financial firms including banks.

4. To address the issue of unemployment, we need a multipronged approach and not just a focus on
growth. Examine the statement in the context of various measures taken by the government in this
regard.
Approach:
 Give an overview of the present status of unemployment in the country.
 Focus on the issue of why we need a multipronged approach rather than focussing just on growth.
 Bring out the government efforts in this regard.
Answer:
According to the Labour Ministry, the rate of unemployment grew steadily from 3.8% in 2011-12 to 5% in
2015-16. . Most of the labour force in India is engaged in low-paying jobs due to the absence of
alternatives, resulting into “disguised unemployment” or “underemployment”.
In general, the government focuses on rapid growth for reducing unemployment but the generation of
employment requires growth in labour-intensive sectors. Thus higher Gross Domestic Product growth
may come from better performance of the services sector, which does not end up creating adequate
jobs. Therefore, growth is a necessary but not a sufficient condition and multiple interventions are
required at different levels to achieve the objective of decent jobs for all, such as:
 Non-farm jobs: As of 2011-12, agriculture accounts for 18% of Gross Domestic Product (GDP) and it
absorbs about 50% of the workforce. Thus, over-dependence on agriculture should be reduced and
alternative avenues of employment in the manufacturing and services sector must be created.
 Shift to the formal sector: A shift to the organized/formal sector should be encouraged by creating
incentives in terms of regulations, tax reduction, labour laws etc.
 Reforming export strategy: India can increase exports by playing on its strengths such as exporting
simple consumer goods, thereby creating employment. .
 Strengthen small and medium enterprises (SMEs): SMEs generate much more employment than
large capital-intensive enterprises.
 International agreements: India should push for inclusion of Free Trade in Services Agreement as
part of ongoing trade negotiations, thereby creating more employment opportunities.
 Competitiveness: Measures such as lowering of corporate tax rates, better public infrastructure,
access to quality affordable power supply, better access to finance etc. need to be taken to increase
competitiveness in the economy
 Increasing public sector investment: to crowd in private sector investment and kick-start growth.
 Retraining: Automation is impacting existing employment not only in IT and BPO but in a host of
other manufacturing sectors like automobiles, engineering etc. This requires retraining of existing
workforce.
 Start up: Youth should be encouraged to explore the entrepreneurship option, and create jobs,
rather than looking for secure wage employment.

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 Measures taken by the government in this regard are:
 Encouraging private sector of economy through fast tracking various projects involving substantial
investment.
 Increasing public expenditure on schemes like Prime Minister’s Employment Generation
Programme, Mahatma Gandhi National Rural Employment Guarantee Act, Deen Dayal Upadhyaya
Grameen Kaushalya Yojana, National Urban Livelihoods Mission etc.
 Creation of new ministry: Ministry of Skill Development and Entrepreneurship to coordinate the skill
activities across Ministries.
 Promoting labour intensive sectors such as tourism, agro-based industries.
 Creating favourable ecosystem, which includes universities acting as innovation hubs, tax policies
such as GST, innovative forms of start-up financing etc.
Therefore, effective measures must be taken to curb unemployment and reap the rich demographic
dividend of India.

5. Nuclear power has a great potential in India to supplement and in the longer term even substitute coal
based power as base load. Discuss. Also, mention the steps taken by the Government of India in order
to achieve nuclear energy self-sufficiency.
Approach:
 Explain, in brief, the concept of base load.
 Mention the potential of nuclear power vis-a vis renewable resources & fossils and how it can
supplement and substitute coal as base load.
 Briefly mention a few areas of concern.
 Steps taken to achieve nuclear self-sufficiency.
Answer:
Base load is the minimum amount of power that a distribution company must make available to its
customers to meet their minimum reasonable demands. Base load may vary at different points of time.
An economy cannot operate effectively and grow without a stable source of power. In this context,
potential of nuclear energy as a base load has emerged as a pertinent point of discussion.
Potential of Nuclear Power to supplement coal:
 Depleting fossil fuels: More than 70% of petroleum products, 40% of gas and 20% of coal
consumption are based on imports. India’s known extractable coal reserves will run out in about 40
years if our coal consumption keeps growing as it has over the past 25 years.
 Climate change & environmental pollution are likely to constrain the development of coal-based
plants. Installation of electrostatic precipitators and carbon capture technologies to reduce local air
pollution will increase the cost of coal power.
Nuclear vis a vis other sources which can replace coal:
 Disadvantage of using renewable energy: Sun and wind may not be available at all times. Thus, to
achieve base load, it needs to be balanced using other reliable sources of energy such as coal, hydro,
nuclear, gas etc.
 Limitation of Hydropower: It is estimated that by 2050, even when we have fully developed our
hydro potential, we will still need balancing power.
 Limitation of gas based power is that it has to be imported and India can’t achieve self-sufficiency.
Although India imports uranium but in future, thorium based reactors will make India self-reliant.
 Indigenous expertise is available to operate Pressurized Heavy Water Reactors (PHWRs) built in India.
However, there certain areas of concerns such as safety of operations including disposal of nuclear
waste, fixing nuclear liability in case of disaster, high cost of operations, time and cost overruns during
commissioning of plant, public protests etc. which should be addressed by government for wider
acceptability of nuclear energy in India.

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 Overall, nuclear power is an economically attractive proposition and can bring energy self-sufficiency but
it has to be materialized without delays and within budget. At present, the total installed capacity of
Indian nuclear reactors is 6,780 MW—a little over 2% of power generated from all sources in the country.
The nuclear power holds enormous potential for energy security and government has also taken
following steps to ensure the same:
 The Government has approved construction of 10 units of India’s indigenous Pressurized Heavy
Water Reactors (PHWR) with total capacity of 7000 MW. The project will help transform domestic
nuclear industry.
 Civil nuclear agreements with USA, Australia, Japan etc. for technology transfer and enriched fuel
availability.
 Adoption of a three stage nuclear power programme in order to utilize thorium which is abundantly
available in India.
 Setting up India Nuclear Insurance Pool (INIP) with a capacity of Rs.1500 crore to provide insurance
cover as prescribed under Civil Liability for Nuclear Damage (CLND) Act 2010.
 Amendment of Atomic Energy Act, 1962 to enable Nuclear Power Corporation of India (NPCIL) to
form joint venture companies with other Indian PSUs.

6. The agriculture sector needs government support but loan waivers are not the solution. Discuss the
statement in the light of recent developments in India.
Approach:
 Briefly discuss issues plaguing agriculture and the loan waivers, recently granted.
 Discuss the pros and cons of loan waivers.
 Give alternative suggestions to loan waivers.
Answer:
According to NSSO's 70th round survey, about 52 percent of the agricultural households in the country
are estimated to be indebted. Consecutive crop failure due to bad monsoon, declining profit margins in
agriculture, incidence of suicide among farmers and political compulsion of the ruling party often force
government to opt for agriculture loan waivers. There have been many such waivers in the past:
Agricultural Debt Relief Program,1990, Bailout program of 2009, loan waivers in Andhra Pradesh and
Telangana in 2014 and the recent loan waivers of Uttar Pradesh and Maharashtra.
The long term adverse consequences of loan waivers are:
 Increases the budget deficits of federal and state governments. For example, it is estimated that the
Uttar Pradesh loan waiver may cost up to 8% of the state’s revenue.
 Leads to inflation.
 Reluctance to pay back loans in anticipation of future loan waivers may lead to some loans being
recognized as NPAs.
 Loan waiver in one state leads to similar demands from other parts of the country.
 Vitiates the credit culture(in the case of repeated waivers, it makes sense for borrowers to default
strategically in anticipation of a waiver)
 Leaves less fiscal space for public expenditure in much needed areas of irrigation, storage, market
linkages, infrastructure, research and development etc.
 Implicitly penalizes the honest borrower.
 Creates a moral hazard, institutions lend recklessly and farmers spend them on consumption.
 World Bank study confirms that banks are reluctant to lend in waiver friendly states, effectively
hampering the output.
 Leads to competitive populism among political parties.
Agriculture sector needs government support but loan waivers are not the solution. India needs massive
investment in areas such as irrigation, water conservation, better storage facilities, market connectivity
and agricultural research. Other measures include:

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  The practice of farmers using a major part of agricultural loan for non-agricultural practices such as
marriages, religious tours etc, must be checked. This practice has been in part responsible for low
agricultural productivity and indebtedness.
 Significant reforms in land leasing, streamlining the incentive structure to promote private sector
investment as well as policy changes for essential commodities and markets.
 Listed schemes designed to check farm distress on the lines of Pradhan Mantri Fasal Bima Yojna,
credit and market reforms, Agriculture Technology Infrastructure Fund (AITF), Biotech Kisan Scheme,
the Advanced Farming- Enriched Farmers Scheme that aims to increase farmer’s income by cutting
production cost and increasing output must be implemented effectively.
 Implementing M.S. Swaminathan committee recommendations relating to MSP.
An equitable land distribution and Low External Input Sustainable Agriculture (LEISA), a system of
agriculture based on principles and options which are ecologically sound, economically feasible and
culturally acceptable should be the ultimate goal of all agriculture related measures.

7. What are the objectives of District Mineral Foundation? Discuss the challenges that need to be
addressed for this institution to achieve its desired objectives.
Approach:
 Give a brief background of the district mineral foundation and enumerate its objectives.
 Analyse the challenges faced by the body, while functioning.
 Mention briefly in conclusion, the solution for those challenges.
Answer:
Section 9b of Mines and Minerals (Development and Regulation) Amendment Act, 2015 provides for the
establishment of District Mineral Foundation (DMF) as a trust and non-profit body through notification
by the State Governments, in any district affected by mining related operations. The primary objective of
the DMF is to work for the interest and benefit of the persons and areas affected by mining operations,
as prescribed by the State Government. The secondary objective is to rebuild infrastructure in mining
affected areas.
To fulfill these objectives, every holder of a mining lease or a prospective license-cum-mining lease has to
pay a certain percentage of royalty to the DMF. According to the Union Ministry of Mines (February
2017), the total DMF collection in the country currently stands at Rs 5,800 crore. The Pradhan Mantri
Khanij Kshetra Kalyan Yojana (PMKKKY) aimed at the welfare of the areas affected by mining, will be
implemented through funds collected under DMF. At least 60% of PMKKKY funds will be utilized for high
priority areas like:
 drinking water supply
 environment preservation and pollution control measures
 health care
 education
 welfare of women and children
 welfare of aged and disabled people
 skill development
 Sanitation The rest of the funds will be utilized undertaking works like:
 physical infrastructure
 irrigation
 energy and watershed development
 any other measures for enhancing environmental quality in mining district.
The challenges and issues that need to be addressed for this institution to achieve its desired objectives
are:

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  Functional overlap: even though the DMF fall within the jurisdiction of the state government, which
determines its composition and function, the central government has a significant stake in directing
the state government as regards its functioning.
 Issues of transparency and accountability: Lack of clarity on the appropriate registration mechanism
for the DMFs as trust needs to be overcome to ensure financial accountability and transparency of
operations. .
 Adverse impact of illegal mining on the rights of the mineworkers is not addressed by this body.
 Ministry of Tribal Affairs, which has an important role in the mining areas, have not been given any
role in the functioning of the DMF.
 The District Collector features on the DMF‘s boards of Trustees as well as its Executive Committee.
This creates a conflict of interest between the overseeing and implementing functions.
 Lack of Public participation: government officials dominate the DMF’s Board of Trustees, and
Executive Committee.
 The status report by Centre for Science and Environment, has pointed out at the lack of
administrative setup and as hindrances in the proper functioning of the DMFs.
These challenges must be addressed by:
 Encouraging public participation locally and use of social audit.
 Having specific websites to display information related to DMF as well as registration of DMFs as
trusts.
 Scientific & comprehensive approach in planning to address immediate as well as long-term needs
and provide future security.
With DMFs coming into effect, the right of the people to benefit from natural resources has been
recognised for the first time. Further, adhering to the recommendations of Shah Commission and the
judgment of Supreme Court in the 1997 Samata case can help this institution achieve its objectives in the
true sense.

8. What factors explain India’s poor merchandise export performance in recent times? Enumerate some
recent measures taken by the government to help boost merchandise exports.
Approach:
 Start with India’s current merchandise export scenario. Bring out the factors responsible for India’s
poor merchandise export performance.
 List the recent measures taken by the government to boost merchandise exports.
 Conclude by suggesting long term measures to further improve India’s export performance.
Answer:
The recent global economic slowdown has adversely affected the world trade growth. India is also not
immune from it as the export growth has slipped into negative territory at 15.5% in 2015-2016. India’s
merchandise export performance is the outcome of the complex interplay of global as well as internal
factors.
Global Factors:
 The economic slowdown in China, Japan and EU, great commodity price crash and a decline in the
trade elasticity has led to lower demand for Indian goods.
 Increased competition to India’s export in third country markets as India competes with China in
several products from apparel and footwear to steel and chemicals.
 Growing sentiment against globalization, slow progress on bilateral trade negotiations (for example
with EU; Brexit poses new uncertainties).
 Increasing competition from LDC’s as they have labour cost advantage over India.
Internal Factors:
 Limited diversification of export basket.

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  Due to India’s increased demand for petroleum products, the export of refined crude and petroleum
products has fallen. This is further affected by fall in petroleum prices.
Recent measures taken by the government:
 Ratified the Trade Facilitation Agreement (TFA) of the WTO. The pact aims to expedite the
movement, release and clearance of goods, including goods in transit.
 GST regime has a fast-track process for refund of duties and taxes to exporters; this will boost India’s
exports.
 Under the Foreign Trade Policy 2015-20, the government introduced ‘Merchandise Exports from
India Scheme’ for diversification of India’s export markets and products.
 Improving `Ease of doing business’: by introducing measures like online submission of documents,
online payment, and electronic fund transfer for facilitating trade.
 Providing better access to various markets: through regional, bilateral and multilateral trade
negotiations with various countries and trade blocks.
 Promoting exports- the State governments have been requested to develop their export strategy,
appoint export commissioners, address infrastructure constraints restricting movement of goods
and address other issues relating to various clearances and build the capacity of new exporters.
The government should continuously monitor the export performance of different sectors and take
need based measures keeping in view the emerging global financial situation and overall economic
implications.

9. Despite numerous health hazards associated with traditional cooking energy fuels, access to clean
cooking in India still continues to be a luxury. Discuss. Also enumerate the steps taken by the
government to make it accessible along with the challenges faced in the process.
Approach:
 Begin with the present status of use of traditional fuels.
 Then explain how it impacts health.
 Enumerate important steps taken by government.
 Also mention the challenges faced and way forward.
Answer:
More than 80% of the rural population in India depends on traditional fuels like firewood, crop residue,
cow dung and lignite, according to 2011 Census. The health hazards associated with this dependence
are:
Health hazards of traditional fuels
 During fuel gathering - In less secure environments, women and children are at risk of injury and
violence during fuel gathering.
 Indoor pollution - Black carbon and PM 2.5 from ‘chullah’ may lead to:
o Inflammation in lungs.
o Reduction in the oxygen-carrying capacity of blood.
o According to World Health Organisation (WHO), more than 50% of premature deaths due to
pneumonia among children under 5 are caused by the particulate matter inhaled from
household air pollution.
o The WHO estimates 500,000 deaths per year in India are due to this pollution.
Hindrances in access to clean cooking fuel
 Mismatch between connection and sustained use: Cleaner alternatives such as LPG connection does
not necessarily translate into sustained use for cooking. For instance, regular refill is a problem for
poor. Moreover, Almost 50% of the country’s LPG consumption is imported, thus, increasing burden
on public exchequer and also mean energy insecurity in long term.

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  Unreliable supply infrastructure: In rural areas the supply chain is weak, thereby it is difficult for
rural household to access clean fuel. For instance, use of electricity as clean fuel through induction
cookers depends on reliable connectivity.
 Lack of awareness and ease of use: Many studies have found that rural people do not consider
traditional fuels hazardous. Moreover, locally available fuels such as biomass is easy to use. Cleaner
alternatives such as biogas, despite numerous government schemes in the past, could not be
sustained as financial and administrative aspects were structured in a way that didn’t promote local
ownership. Incentives to ensure good quality construction were not in place, which resulted in faulty
construction
 Lack of convergence among various Ministries: Clean cooking fuel is a multidimensional issue. A
lack of convergence between ministries such as Health, Women & Child Development, Petroleum,
has impeded creative and effective mechanism to popularise clean alternatives. For instance, a
conditional cash transfer programme for compulsory use of LPG cylinder during pregnancy by making
it a sub-programme under Janani shishu suraksha program.
Government initiatives
 The Ministry of Petroleum and Natural Gas has three schemes to augment LPG connectivity- Rajiv
Gandhi Gramin LPG Vitran Yojana, Pradhan Mantri Ujjwala Yojana and PAHAL Scheme.
 The Ministry of New & Renewable Energy is implementing a National Biogas and Manure
Management Progamme (NBMMP) for setting up biogas plants in the country and National Biomass
Cookstoves Initiative to enhance the use of improved biomass cookstoves.
 The Ministry of New & Renewable Energy’s programme of intensive distribution of clean fuel
cooking devices like Unnat Chulhas, Solar Cookers, Solar Lamps, Solar home lighting Systems etc.
using CAMPA fund.
Suggested solutions
 Diversified choices of fuel such as biomass, biogas, electricity etc. as every fuel has certain limitations
in certain areas.
 A concerted policy with coordination between various ministries. E.g. Linking clean cooking fuel
programmes with poverty reduction/income generation programmes. Synergising efforts by the
national governments, private sector, NGOs and international agencies like UN.
 Mass awareness campaign for attitude change and making people stakeholders in any clean fuel
initiative.

10. Taxing agricultural income is an idea whose time has come. Critically discuss.
Approach:
 Discuss the arguments for taxing agriculture income.
 Also give argument against taxing agriculture income.
 Provide a suitable conclusion.
Answer:
Income Tax Act defines agricultural income as -“Rent/revenue from agricultural land, or income derived
from such land through agricultural operations, or income derived from buildings on that land”.
Currently, the Act excludes agricultural income from a computation of total income.
Recently, a NITI Aayog member and the Chief Economic Advisor suggested that agricultural income be
taxed, which, though not a new demand, has not been accepted in India. The issue is analyzed as under:
Arguments in favor
 India’s tax base is one of the lowest in the world, with a direct tax to GDP ratio of 5.6% in 2016-17
and taxing agricultural income will certainly widen the tax base.
 Not taxing agriculture burdens more the formal sectors that are already overtaxed and further
handicaps the government spending on social sector.

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  Agricultural subsidy on fertilizers, pesticides, power consumption etc. can be financed by taxing the
agriculture income.
 India has a presence of rich farmers as well as industrialists who own hundreds of hectares of
agricultural land who can pay these taxes.
 Tax Administration Reform Commission (2014) points out that agricultural income of non-
agriculturists is being increasingly used as a conduit to avoid tax and for laundering funds.
Arguments against
 About 60% of Indian farmers are small farmers, with small holdings and a small marketable surplus.
 The agrarian distress has been deepening, and there has been a rise in farmer suicides.
 The income-expenditure gap for a majority of farmers is in the negative.
 The agricultural income is highly unstable with high dependence on monsoons and thus prone to
climate disasters like droughts.
 Fluctuating market prices make farmers even more vulnerable. For example, recently the prices of
crops like pulses and chillies have collapsed.
 When market and monsoon determine the agricultural income, defining a threshold for taxation is
difficult. For example, acres have no meaning in agriculture.
 Given improper land records, identifying the rich farmers, who can pay these taxes, would be
difficult.
 Calculation of profits from agriculture is extremely complex as accounting for inputs including
subsidies is onerous.
 Control on exports and stockholding to suppress prices for consumers amounts to an implicit tax.
Suggested reforms
Before taxing agricultural income, the government should aim at increasing the flow of credit, especially
to those who are dependent on the rains, and aim for enhancing the quality and cost competitiveness of
farm commodities to make them globally competitive.
 Increase the insurance cover so that farmers are protected from fluctuating output and prices.
 Instead of uniform subsidy, it should be made differential. For example, remove subsidies in the case
of irrigated farming as opposed to rain-fed farming.
 Reform agricultural marketing, and remove supply chain bottlenecks.
 Expedite the implementation of Land Records Modernization Program, which would help identify the
big landlords, who can be taxed to start with.

11. Dismantling of administered price mechanism for fuels is being deemed as a significant piece of
economic reform. Analyse. Also, discuss how the recently introduced dynamic fuel pricing can prove to
be beneficial for both the OMCs as well as consumers.
Approach:
 Begin with a brief introduction about administered price mechanism.
 Then, write about the benefits of the initiative (dismantling of APM) for Indian economy as a whole.
 Then explain recently introduced dynamic fuel pricing.
 Further give arguments for the benefits of dynamic price mechanism to OMCs and consumers.
Answer:
Administered Price Mechanism (APM) for fuels denotes that the price of fuel was set by the dictates of
government rather than the market forces, that is, the prices were either administered or subsidized.
Dismantling of APM is deemed to be beneficial for Indian economy because:
 It will lead to efficient allocation of a scarce resource which was being over-used by the consumers
due to lower prices.
 The burden on the state fiscal accounts will also be reduced as higher imports of crude oil at higher
prices due to increased demand need not be subsidised by state.
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  The idea of providing returns on cost-plus formula to OMCs was not encouraging to encourage
efficiency in production because it was not at all profit motivated.
Under APM, state-run fuel retailers used to revise rates on the 1st and 16th of every month, based on
average international price in the preceding fortnight and the currency exchange rate. In dynamic fuel
pricing, retail selling prices of petrol and diesel will be revised daily. It would link daily sales at all their
petrol pumps with the international prices of crude oil.
Its benefits for OMCs
 Oil companies would be free to take independent decisions based on import parity and market
forces in pricing of petroleum products rather than being governed by the dictates of the
Government.
 Due to the reining in of speculative market forces, the impact of increasing/decreasing prices on the
working capital of companies and dealers would be minimised.
 It ensures that OMCs do not lose out for an entire fortnight in the event of a sharp rise in crude
prices as they will be able to immediately pass on the price hike to the customers.
Its benefits for consumers
 The move will take the economy towards greater transparency in fuel pricing and free pricing of
petrol and diesel.
 It will ensure that the benefit of even the smallest change in international oil prices can be passed
down the line to the dealers and the consumers.
 Besides the move will remove big leaps in rates that need to be effected at the end of the fortnight.
 Consumers will be more aligned to market dynamics as India will be following the practice of the
most advanced markets.
 This will also lead to public sector OMCs offering competitive prices. Not only, it will improve the
competitiveness of the economy overall, but also it would incentivise investments in the oil sector.
The introduction of dynamic pricing will definitely bring consumers on a better footing as it will make the
demand elasticity of the consumers reflected well in the markets. This will be possible as the price and
sales data will be available in public for the market participants to reflect the same. However, there are
certain obstacles to be overcome like updating of prices in unautomated petrol pumps and staying the
course on hardening of oil prices.

12. Ensuring that buildings comply with green norms will require much more than current arrangements.
Analyse. Also discuss the relevant features of the new building code issued by the Bureau of Energy
Efficiency in this context.
Approach:
 In the introduction, highlight the reasons for non compliance of building activities with green norms
 Give a holistic overview of the issue concerned.
 Give a brief background of the National Building Code, 2016.
 Analyse the features of the Code which highlight environmental norms of buildings.
Answer:
Green building norms ensure less usage of water, optimises energy efficiency, conserves natural
resources, generates less waste and provides healthier spaces for occupants, as compared to a
conventional building. In the current scenario, the National Building Code regulates the building
construction activities across India. Despite being a comprehensive code it does not incorporate green
standards i.e. it is not compulsory for the builder to make environment friendly structures. Further, the
National Building Code does not include water or material efficiency standards. It does have the
standards for energy efficiency but the compliance is voluntary. It is due to these deficiencies that most
buildings in India do not comply with the environmental norms.

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 The leadership in green buildings norms is provided by non-government organisations such as:
 Indian Green Building Council (IGBC) by Confederation of Indian Industry (CII).
 Green Rating for Integrated Habitat Assessment (GRIHA) by The Energy and Resources Institute
(TERI).
Leadership in Energy and Environmental Design (LEED) by The Energy and Resources Institute (TERI) and
the US Green Building Council (USGBC).
State governments often provide incentives to the green buildings that adhere to the above-mentioned
non-governmental standards. However, most of the times grant of these incentives are not backed by
proper monitoring of the resource savings and actual energy use in such buildings. Thus, there is no
adequate mechanism in place to ensure compliance.
Therefore, in order to ensure that buildings adhere to the green norms, the Energy Conservation
Building Code, 2017 has been issued by the Bureau of Energy Efficiency. The relevant features of this
Building Code are:
 ECBC 2017 is developed with technical support from United States under Partnership to Advance
Clean Energy-Deployment Technical Assistance (PACE-DTA) Program
 Standards: it prescribes the energy performance standards for new commercial buildings to be
constructed across India
 Integrated approach: ECBC 2017 sets parameters for builders, designers and architects to integrate
renewable energy sources in building design with the inclusion of passive design strategies.
 Three tier: It has three levels of adoption - basic, ECBC Plus, and Super ECBC. These levels determine
the degree of carbon efficiency. For Ex: Super ECBC helps you to move to a net zero or even a net
positive scenario.
 Specific criterion: For different application of a building like school, hospital, residential etc. Thus, in
the form of ready reckoner, different purpose building codes can be adopted easily by developers.
 ECBC compliant building would require minimum energy savings f 25%. Higher grades like ‘ECBC
Plus’ or ‘Super ECBC’ status will be accorded if energy savings of 35% and 50% respectively are
achieved.
 It is estimated to achieve a 50% reduction in energy use by 2030 ad peak demand reduction of over
15GW in a year.
Thus, with rapid urbanisation in India, it is imperative that active steps are taken to ensure that buildings
comply with green norms.

13. Given the worsening of air quality in National Capital Region, discuss the need for Graded Response
Action Plan against air pollution and the challenges in its implementation.
Approach:
 Explain graded response to air pollution.
 Mention its need.
 Discuss the challenges in its implementation.
Answer:
Environment Ministry recently issued a ‘Graded Response Action Plan’ against air pollution in the
National Capital Region (NCR). It was prepared by the Supreme Court mandated Environment Pollution
Control Authority (EPCA).
A graded response lays down stratified actions that are required to be taken as and when concentration
of pollutants, in this case particulate matter, reaches a certain level. For example, if PM 2.5 is 100 µg/m³,
then mechanised sweeping and water-sprinkling along roads has to start. Traffic police will ensure
smooth flow of traffic, and all pollution control measures like stopping landfill fires, enforcing Pollution
Under Control (PUC) norms and ban on firecrackers will be enforced. These responses change with
concentration. The plan is not restricted to NCR but neighbouring states will also participate.

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 Concentration of pollutants will be communicated to EPCA which will be average for the entire city. Job
of ensuring its implementation will be of EPCA, which will delegate the responsibility to the concerned
departments. It has been estimated that about 16 agencies will coordinate to implement various parts of
the plan.
Need for plan
 High level of air pollution in Delhi-NCR especially after Diwali and during winters. Levels of PM2.5
and PM 10 hit 999 µg/m³, while the safe limits are 60 and 100 respectively.
 Current schemes and measures have proven to be ineffective as Delhi has emerged as one of the
most polluted cities in world.
 Poor quality air irreversibly damages the lungs of 50% of children in Delhi and causes pulmonary
diseases in adults.
 Government takes knee-jerk reactions like shutting down power plants and stopping construction
which hurt different sections and will not be required if the plan is followed.
 Cities like Beijing and Paris have implemented it with noticeable results.
Challenges in implementation
 A large number of agencies will have to work together in tandem. Therefore, ensuring coordination
would be a challenge.
 Steps will be diluted if neighbouring states don’t cooperate.
 Immediate implementation may not be feasible at times. For example, if during emergency, odd-
even has to be imposed, it will be very difficult to implement it without a notice of at least a week so
that alternative arrangements for public transport can be made and an awareness drive launched.
Hurdles notwithstanding, this scheme has been proposed after much deliberation and discussions and it
must not be ceded to challenges. For success of the scheme, inter-agency, inter-state and centre-states
cooperation must be ensured. Conception of EPCA as a coordination agency will help. To ease the
burden of such schemes on people, innovative ways must be adopted, for example, public transport can
be made free during its implementation.

14. A new disease emerging in any part of the world is a global threat. In the context of “zoonoses” and
“emerging infectious diseases”, analyse the risks for India. Also, identify the structures in place and
measures required to combat these risks.
Approach:
 Introduce in brief the meaning of emerging infectious diseases (EIDs) and zoonosis.
 Discuss the factors which put India at risk of these EIDs and zoonosis.
 Mention the changes needed in health system and strategy to combat the above problem.
Answer:
In an increasingly interconnected world, emergence and spread of infectious diseases constitute grave
health, economic, developmental and security challenges globally. Notably, Emerging Infectious Diseases
(EIDs) are diseases of infectious origin whose incidence in humans has increased within the recent past
or threatens to increase in the near future. These include new, previously undefined diseases as well as
old diseases with new features e.g. Avian influenza, chikungunya, Nipah virus etc.
Over 30 new infectious agents have been detected worldwide in the last three decades; 60 per cent of
these are linked to zoonoses i.e capable of being transmitted to humans from animals. In the recent past,
India has seen outbreaks of at least eight organisms of emerging and re-emerging diseases in various
parts of the country, six of these are of zoonotic origin.
The Indian subcontinent is a ‘hotspot’ for zoonotic, drug-resistant and vector-borne pathogens. India is
especially vulnerable because of:

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  High population density: With 1.34 billion people, 512 million livestock and 729 million poultry, the
density and rates of human–animal, animal–animal and human–human contacts are high.
 Inadequacy of research: Threats from EIDs are inadequately understood because of poor domestic
research and lack of international collaborations due to restrictive policies on sharing clinical and
research materials. E.g. There are 460 medical colleges and 46 veterinary colleges in India, but most
do little or no research.
 Coordination issues: The bureaucratic approach and lack of inter-sectoral coordination leads to
fragmented response.
 Lack of policy focus: Recently approved National Health Policy has not mentioned “zoonosis” and
“emerging infectious diseases”, thus, missing the opportunity to have a comprehensive strategy for
it.
 Anthropogenic changes: Deforestation brings wildlife into direct contact with humans and
domesticated animals, increasing the risk of zoonosis along with changed weather patterns which
further escalates the spread of EIDs.
 Diverse animal population: For instance, India has an incredibly diverse bat population which
harbours 10% of corona viruses. Further, little is known about the viruses in Indian bats and their
disease potential.
 Changing lifestyles, patterns of behavior etc., for example, improper food handling and preparation
in order to save time and for convenience.
 Lower latitudes: areas that lie in lower latitudes are at a greater risk of new and emerging EIDs.
 Poverty and social inequality; e.g. tuberculosis is primarily a problem in low-income areas.
Structures in Place
 National Apical Advisory Committee for National Disease Surveillance and Response System (NAAC)
created in 1996
 National Surveillance Programme on Communicable Diseases (NSPCD) in 1997
 Integrated Disease Surveillance Programme (IDSP) established in 2004, as project, in 101 districts and
later expanded to cover all States and districts. It involves Central Surveillance Unit (CSU), State
Surveillance Units (SSUs) District Surveillance Units (DSUs) a surveillance unit and peripheral reportig
units at block level.
 IT connectivity has been established with all the States, districts and medical colleges through 776
sites for rapid data transfer, video conferencing and distance learning activities.
 Commitment to International Health Regulations (IHR) 2005 of the WHO. This requires all countries
to have the ability to detect, assess, report and respond to public health events and disease
outbreaks.
 National Vector Borne Disease Control Programme (NVBDCP)
 National Surveillance Programme for Communicable Diseases
 National Centre for Disease Control (NCDC) has initiatives such as Division of Zoonosis dedicated to
the control of zoonoses and Epidemic Intelligence Service (EIS)
 Indian Council of Medical Research (ICMR) signed MoU with Indian Council of Agricultural Research
(ICAR) for cooperation in the area of zoonoses.
 First SAARC Epidemiology Networking Forum Meeting held primarily to operationalize a sustainable
and functioning veterinary epidemiology network.
Structures and Measures required to combat these risks are:
 There is a need to move from being reactive to proactively understanding zoonotic pathogens before
they cause human disease.
 Identifying the animal source of infection and intervene to stop further transmission. For example,
setting up a district level emergency response team which acts swiftly on such incidents.
 Culture of safe health care practices for timely infection control to stop transmission within hospitals
and healthcare facilities. Capacity augmentation in hospitals ( medical staff, supplies & equipments)
to cope up with epidemics.
 Developing robust early warning, communication & surveillance system at ports, airports etc.

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  A strategy should be evolved for the law enforcement/national defence structure as EID etc.
promotes regional tension, mistrust and distort productive economic growth.
 An inter-ministerial task force should prepare a policy framework that enables preparedness by
strengthening inter-sectoral research on zoonosis and health systems. There needs to be regular
collection of data for unusual occurrences and of their origins. Also the National Health Policy should
include specific section on how to deal with EIDs.

15. There is a growing recognition that efforts should not be limited to post-disaster relief and
reconstruction, rather development paradigm should integrate disaster risk reduction strategies.
Discuss in the context of India.
Approach:
 Introduce by highlighting the risk of disasters and thus the importance of disaster management for
India (use some report or data to support your argument).
 Explain in brief what is the meaning of Disaster Risk Reduction strategies and risk management.
 Discuss the importance of the statement given in context of India.
Answer:
India has been ranked 77th on the World Risk Index out of 171 countries according to their risk of
becoming a victim of a disaster as a result of natural hazards. This signifies the importance of having an
effective disaster risk reduction strategy and risk management for India.
Initiatives taken by India in risk reduction strategy are as follows:
 Call for enhanced global cooperation in pursuing effective disaster management and help from all
communities to become self-reliant in mitigating the impacts of disasters. India has offered its full
commitment to support international efforts in disaster risk reduction and achieving substantive
outcome in this direction.
 India has released the country’s first ever National Disaster Management Plan, based on the global
blueprint for reducing disaster losses. It is based on the Sendai Framework for Disaster Risk
Reduction and is based on four priorities for action:

Priority 1. Understanding disaster risk:

Understanding disaster risk in all its dimensions of vulnerability, capacity, exposure of persons and
assets, hazard characteristics and the environment which can be used for risk assessment,
prevention, mitigation, preparedness and response.

Priority 2. Strengthening disaster risk governance to manage disaster risk:

Disaster risk governance at the national, regional and global levels is very important for prevention,
mitigation, preparedness, response, recovery, and rehabilitation. It fosters collaboration and
partnership.

Priority 3. Investing in disaster risk reduction for resilience:

Public and private investment in disaster risk prevention and reduction are essential to enhance the
economic, social, health and cultural resilience of persons, communities, countries and their assets,
as well as the environment.

Priority 4. Enhancing disaster preparedness for effective response and to “Build Back Better” in
recovery, rehabilitation and reconstruction:

The recovery, rehabilitation and reconstruction phase is a critical opportunity to build back better,
including through integrating disaster risk reduction into development measures.

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  This denotes India’s efforts to strengthen disaster risk governance, which included the establishment
of a National Platform for Disaster Risk Reduction.
 Space-based technologies for averting natural disasters and their management can also be used for
this purpose.
 Development planning at macro to micro levels i.e. national, regional, city, block and village levels
should have disaster risk reduction and management as essential component.
 Municipalities and Panchayats should be empowered to become the nodal agencies for disaster risk
reduction.
 Proper implementation of Rules and regulations, Codes should be followed in letter and spirit such as
Building codes should be made according to the earthquake prone zone, mock drills by NDRF and
others, sensitization of public, etc.

"If you fail to prepare, you prepare to fail”, sounds true in Indian context if the development paradigm
shuns disaster risk reduction and management now.

16. The emphasis on TRIPS plus by developed countries is contrary to the position and interest of
developing countries like India. Discuss.
Approach:
 Give a brief introduction of TRIPS and TRIPS plus.
 Write about the stipulated provisions prescribed under TRIPS plus agreement.
 Discuss how these provisions are going to impact the interests of developing countries in contrast
with the developed world.
 Mention India’s stand on TRIPS plus.
Answer:
The Trade Related Intellectual Property Rights (TRIPS) Agreement lays down certain minimum standards
of protection and enforcement of Intellectual Property Rights by its members through enactment of
national laws and regulations. TRIPs Plus is higher level of protection norms demanded by the developed
countries that go beyond the minimum standards imposed by WTO’s TRIPs regime.

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 The provisions under TRIPS plus may take away the flexibilities that exist in the TRIPS Agreement. Few
examples of provisions under TRIPS plus agreement are:
 Extending the term of a patent longer than the twenty-year minimum.
 Introducing provisions that limit the use of compulsory licences or that restrict generic competition.
 Data exclusivity demand by developed countries (information concerning a drug’s safety and efficacy
is kept confidential for a period of five or ten years).
 Limits on parallel importing (when the patent holder sells a product to a buyer who exports the
product to a second buyer in another country).
TRIPS Plus provisions are also against Doha Declaration of 2001, which tried to redress the imbalance in
TRIPS, and restated the primacy of health over commercial interests and reaffirmed countries’ right to
use TRIPS safeguards such as compulsory licenses or parallel importation to overcome patent barriers to
promote access to medicines, and guided countries in their use.
Thus, it doesn’t favour the unique demands of developing countries and is only favourable to developed
ones. Many developing countries who are members of FTAs are under pressure to enact these tougher
conditions in their patent laws. However, various issues have been raised regarding TRIPS Plus provisions:
 There exist concerns from developing countries that once such levels of protection are given
multilaterally, it will reduce competition and may lead to price rise of medicines, affecting health
security in poor countries.
 It will restrict the operation of the developing countries’ generics drugs manufactures. Also, it will
prevent firms from obtaining high technology at affordable prices. All these will lead to reduced
exports from developing nations.
India has consistently objected to provisions under TRIPS plus. India has clearly stated its non-readiness
to engage with anyone on TRIPS plus issues which could lead to ever-greening of patents or blocking of
compulsory licenses. It has reflected its opposition in the country’s FTA negotiation with countries like
Japan and the EU who demand TRIPs Plus level of protection. Developed countries should assess their
conduct of trade negotiations with developing countries with a view to ensuring that development
objectives remain a priority during those negotiations.

17. Coherently dealing with security threats facing India requires deeper operational synergies among the
army, navy and air force. Discuss in the light of the latest Joint Doctrine for Indian Armed forces. Also,
delineate the reasons for resistance to the idea of a joint Chief of Defence Staff over the years.
Approach:
 Delineate the need for joint efforts between the different branches of the armed forces.
 Discuss the recently unveiled Joint Doctrine for Indian Armed forces.
 In the last part link the idea of jointness to that of joint chief of staff and underline the reasons for its
non implementation.
Answer:
Need for integration of all the wings of the armed force in order to create synergies was highlighted for
the first time in India by Kargil Review Committee and was reiterated by Naresh Chandra Committee in
2012. However, it was only recently that the three wings have come up with a Joint Doctrine, which aims
to coherently deal with all possible security threats facing India including conventional and proxy wars.
 The doctrine envisages the following: It lists a range of security threats confronting the country
including transnational threats, “proxy war” in Jammu and Kashmir and Left-wing extremism in
various parts of the country and indicates that “surgical strikes” could be a key feature in counter-
terror operations.
 The joint doctrine proposes joint training of personnel, unified command and control structure
besides pushing for a tri-service approach for modernization of the three forces.
 The doctrine will facilitate establishment of a broad framework of concepts and principles for joint
planning and conduct of operations across all the domains such as land, air, sea, space and
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 cyberspace. For this, joint operations committee under Chief of Staff Committee would conduct and
plan operations at strategic level and Higher Defence Organisation will foster further inter-service
coordination in terms of planning, execution of operations and force planning.
 The doctrine also talks about the steps initiated for the establishment of the ‘Defence Cyber Agency’,
‘Defence Space Agency’ and ‘Special Operations Division’.
 Intelligence structure: It stressed on coordination with agencies like RAW, IB and Intelligence
organisations of the para-military forces as part of the Joint Intelligence Committee under the NSA.
Shortcomings in the doctrine:
 Doctrine fails to mention anything about the joint Andaman and Nicobar Command. As global
militaries are increasingly converging towards joint commands (for e.g. China), what is the exact
model of jointness that the Indian military wishes to follow has not been answered.
 It creates an unnecessary controversy about India’s nuclear doctrine by describing it as “credible
deterrence” instead of “credible minimum deterrence”.
The debate on jointness within the Indian military has been going on for almost sixty years. However,
such an idea has not gained traction due to the following reasons:
 India’s political class were fearful of an empowered military.
 Bureaucracy was apprehensive of losing its hold on defense bureaucracy to the members of armed
forces.
 Services also resisted jointness as they privileged the autonomy afforded by the single service
approach.
The latest Joint Doctrine is progressive step and needs a more detailed explanation of important areas
for defense cooperation in the country.

18. Over the years, laws dealing with money laundering have proved to be less than effective. Briefly
discuss the statement in the context of government's proposal to make money laundering a separate
criminal offence. Also enumerate the recommendations made by FATF to combat money laundering.
Approach:
 In the introduction briefly highlight the seriousness of money laundering and then proceed to
delineate laws dealing with money laundering.
 Briefly discuss arguments regarding there ineffectiveness.
 Link the above discussion with the new proposal to deal money laundering as a separate criminal
offence.
 Lastly, enumerate FATF recommendations.
 Conclude by highlighting the progress made by India in combating money laundering.
Answer:
Money laundering is the process of transforming illegally gained money or proceeds of crime into
legitimate money and assets. It helps in flourishing organised crime and has debilitating impact on
economy as well as society of any country. To curb this menace, India has brought several laws over the
years such as:
 The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974
(COFEPOSA)
 The Smugglers and Foreign Exchange Manipulators Act, 1976 (SAFEMA)
 Foreign Exchange Regulation Act, 1973 (FERA)
 Prevention of Money Laundering Act, 2002 (PMLA)
The PMLA 2002 is comprehensive legislation aiming to prevent money laundering and to provide for
confiscation of property derived from money laundering. However, it has not been effective in
prevention of money laundering from India. The law has seen only one conviction in 15 years of its

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 history. To make anti-money laundering measures more effective, union government has proposed
making money laundering a separate criminal offence.
With this, the money laundering offence will be investigated by the Enforcement Directorate, irrespective
of a probe by other agencies. This will facilitate quick action.
Under the current arrangement in India, the fate of money laundering cases depends on the probe and
prosecutions in predicate offences pursued by primary agencies. These restrictions cause impediments
in taking the money laundering cases to their logical conclusion.
It will also align India’s quest against money laundering with best practices around the world. Several
countries such as the United Kingdom have defined it as a separate criminal offence.
However, the government will have to bring about several amendments to the PMLA, including the
current definition of the “proceeds of crime” that is right now dependent upon the predicate offences as
listed in the Act’s schedule.
FATF’s key recommendations
 Identify, assess and take effective action to mitigate their money laundering and terrorist
financing risks.
 Countries should have anti-money laundering policy and should designate an authority that is
responsible for such policies.
 Criminalise on the basis of the Vienna Convention and the Palermo Convention.
 Enable competent authorities to confiscate property and proceeds from money laundering.
 Ensure that financial institution secrecy laws do not inhibit implementation of these measures.
 Prohibit financial institutions from keeping anonymous accounts.
 Require financial institutions to maintain all records on transactions.
 Money transfer services providers should be licensed or registered.
 Identify risks that may arise with development of new technologies.
 Ensure that financial institutions monitor wire transfers.
 Ensure that FIs’ foreign branches and subsidiaries apply these measures.
 Apply appropriate countermeasures when called upon to do so by FATF.
 Financial Institutions should report suspicious transaction to FIUs.
 Establish financial intelligence unit (FIU).
 Ensure that designated law enforcement authorities have responsibility for money laundering and
terrorist financing investigations.
 Take immediate steps to become party to important global conventions framed to combat money
laundering.
 Provide mutual legal assistance in relation to money laundering.
 Effectively execute extradition requests in relation to money laundering and terrorist financing.

19. State the reasons which render Critical Information Infrastructures (CII) a preferred target of attack
from state and non-state actors. Also, mention the steps taken by the government in order to secure its
critical information infrastructure.
Approach:
 Briefly explain what you understand by Critical Information Infrastructures (CII).
 State the factors which render CIIs as preferred targets from both state and non-state actors.
 Mention the steps taken by the Indian government in this regard.
 State the way forward.
Answer:
IT Act 2000 defines CII as the computer resource, the incapacitation or destruction of which shall have
debilitating impact on national security, economy, public health or safety. In simple words, it refers to ICT

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 systems that are essential to the operations of national and international crucial Infrastructures. Some of
the examples include telecommunication networks, online payment gateways, electronic stock trading.
Since CIIs are complex, interconnected and interdependent, any disruption in their functioning has the
potential to quickly cascade across other CIIs causing national instability. Since the price of their failure is
too high, they are prone to attacks from state and non- state actors.
Factors which render CII as preferred targets:
 Adversary nation: global competitions and geopolitical confrontations fuel the desire among
governments to develop capabilities to execute persistent and sophisticated cyber operations
targeting communication networks. For e.g. cyber-attacks by Russia on Georgia, use of Stuxnet
malware to damage Iran’s nuclear facility.
 Embedded systems: Latest technologies and electronic components are procured via global supply
chain. It can potentially result in tampering, insertion of malicious software etc.
 Cyber espionage: spywares are installed in equipment to obtain secret information.
 Insider Threat: It can be in the form of disgruntled/compromised employee, unintentional hiring of a
hacker etc. for e.g. hacking and subsequent revelations by Edward Snowden caused a global havoc.
 Lack of Training: If an employee is inadequately trained, chances of CII disruption or damage by
accident are higher.
 Conceal origin: the technology permits attacker to conceal its origin making it more lucrative for the
state and non-state actors.
 No conventional restrictions of being in proximity to start an attack. Cyber attack can be done from
any location to affect systems anywhere in the world.
India is vulnerable to a myriad of threats, ranging from cyber intrusion to attacks on information assets.
Reports reveal that cyber-attacks on government sector doubled from 14% in 2016 from 7% in 2015.
Attacks on the financial sector also rose from 3% in 2015 to 14% in 2016.
Steps taken by the government in this regard:
 Creation of National Critical Information Infrastructure Protection Centre, the national nodal agency
in respect of CII protection
 Implementation of National Cyber Security Policy and appointment of a National Cyber Security
Coordinator
 Enactment of Information Act, 2000, dealing with electronic transactions, digital signatures, cyber-
crimes, cyber security, etc.
 Plan to create a National Cyber Coordination Centre to handle online threats relating to national
security.
 Establishment of CERT: In order to respond to computer security incidents.
 Establishment of Defence Information Assurance and Research Agency for cyber security issues of
the tri services and Defence Ministry.
To safeguard and secure CII, all stakeholders have to work together and evolve innovative solutions,
share best practices, coordinate joint exercises, map vulnerabilities, and conduct counter-measures.

20. In the context of recent developments briefly explain the issues involved in the Doklam area. What are
the challenges that India faces in the management of border with China? In this context, also identify
key steps taken by India over the years.
Approach:
 Introduce by throwing light on Doklam issue in brief.
 Discuss the challenges faced by India in management of Indo-China border.
 Mention the steps taken by India to overcome the above challenges.
 Conclude on the basis of above points.

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Answer:
Bhutan’s Doklam Plateau (also known as Doka La by India and claimed as Donglun by China), lies at the
tri-junction of India’s Sikkim, Bhutan and China-held Tibet.
Doklam is a “disputed” territory between Bhutan and China which has a bigger impact on India’s
security. This is one key reason why Bhutan did not accept a generous ‘package deal’ from China in 1996,
despite getting more disputed territory and it could also solve the border issue with China.
In the present stand-off China’s PLA demolished two bunkers and then began constructing a road
towards Doka La. The Royal Bhutan Army (RBA) tried to intervene, but were pushed back. The RBA then
sought assistance of the Indian troops, who moved down the ridge and obstructed the construction
work, leading to the standoff.
Challenges faced by India in management of border with China:
 Lack of connectivity is a major impediment in border management. Inspite of green signal for 72
roads, three airstrips and numerous bridges along the undefined LAC only nine roads along the 17
Sino-Indian border have been built till now. Thus, Indian soldiers have to trek 10-15kms.
 Huge delays due to pending mandatory clearances from the ministry of environment and forests as
well as inadequate funding.
 There are multiple authorities managing the border, including the Army, the Indo-Tibetan Border
Police (ITBP), the Border Security Force and the Assam Rifles. This leads to the lack of accountability
as well as problems of command and control.
 Even the ministries coordinating these forces are different for e.g. ITBP reports to the Ministry of
Home Affairs and the Indian Army reports to the Ministry of Defence.
 Any mobilization or relocation of Border Roads Organization’s (BRO) resources become the spark-off
point for the Chinese and they retaliate by launching a series of multi-mode and multi-dimensional
incursions involving camping, painting CHINA in Mandarin on rock faces etc.
 India’s borders comprise a vast variety of terrain encompassing deserts, plains, hills, mountains and
riverine areas which make it difficult to fence and also extremely porous and easy to cross.
Recent initiatives by India:
 The government of India is now conducting a fresh survey of the northern plateau in Sikkim to
counter claims by China.
 Construction of roads of operational significance in border areas along India-China border like Border
Road Organisation (BRO) undertook the building of 61 roads near the India-China border. It also plans
to construct 285 roads with a total length of over 4,890 km and an all-weather road to Ladakh. But
the pace of infrastructure building has been alarmingly slow.
 The government has also approved the construction of four strategic roads in Ladakh.
 Upgradation of advance landing grounds, airfields and construction of border roads, are now being
opened to the private sector so as to enable speedy implementation of some of these critical border
infrastructure projects.
 The government has put projects on a fast track like enhancing road connectivity in Jammu and
Kashmir.
 Improving the national highway 1D (Zozila-Kargil-Leh road) and construction of a 3 km two-lane road
at national highway-1B (Batote-Kishtwar).
 Important road projects in the Northeast include two-laning of trans-Arunachal highway and
upgradation of Stillwell road in Arunachal Pradesh.
India has to recognize that border infrastructure remains a critical element in regional integration. In the
age of globalization and increasing economic interdependence, connectivity is of critical importance and
India cannot afford to have poor border networks of rail & road and energy transportation linkages,
which can prove to be a disadvantage for the country.

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